FOREIGN enterprises will not be promised fixed yields for their investment, according to mainland officials. Vice-Premier Li Lanqing said China's 22,000 foreign enterprises were capable of obtaining reasonable returns. The firms complained that local firms were given special treatment, but, in fact, foreign enterprises enjoyed their own preferential policies, Mr Li said, at an economic forum in Beijing. Vice-Minister of Power Zhao Xizheng said the Government should not promise fixed returns for overseas investors. Foreign enterprises should bear the investment risks and seek the highest yields under market conditions, he said. But Vice-Minister of Railways Sun Yongfu said his ministry was considering offering preferential treatment for foreign investors, such as increasing railway transport fees, to ensure the yields were similar to the amounts investors expected. It is understood that foreign investors ask for a return rate of 15 to 20 per cent. China is trying to lure foreign investment into the railway sector, which opened up to overseas investors only recently. Foreign investors have long expressed concern over the yield from mainland projects. Many businessmen compare the returns they can get from China with those in other Asian countries. And, in the past, investors have delayed investing in Chinese power projects as no attractive yields were guaranteed. But officials said foreign investors should consider the potential of the mainland market and their long-term interests. Mr Zhao also said power projects' returns should be decided by market forces. He said yields previously were controlled by whether Chinese could afford to pay higher electricity fees.
